The civil construction sector has fared relatively well throughout the pandemic, with only moderate drops in backlog levels, revenues and profit margins reported, according to Dodge Data & Analytics’ The Civil Quarterly, a quarterly snapshot of the current business health of contractors operating in the civil construction environment. In fact, concerns in these areas leveled off for most of the contractors surveyed for the Q1 2021 report, with 65% indicating they are optimistic about the ability of the market to provide new work, a marked increase from 58% in Q4 2020.
Yet, concerns over supply chain disruptions have increased dramatically as the economic recovery has gained steam. In Q4 2020, The Civil Quarterly reported less than half (43%) of civil contractors believed construction material price fluctuations had impacted their projects. Now, as of the Q1 report, 71% have indicated they are experiencing serious issues getting materials to projects and 76% expressed concern about expected cost increases for materials over the next six months.
Of those expressing concerns, 69% anticipate a rise in the price of steel, with many also expecting increases in pavement/concrete, aggregate, lumber and piping. Equipment costs are a growing factor, as well, with 34% of civil contractors reporting impacts from the previous six months due to the cost of equipment and 43% showing concern that equipment prices will continue to rise.
Continued cost increases could have sizable ramifications for civil construction going forward. According to Dodge Data, “The delay in these direct experiences of supply chain challenges may suggest long-term effects that are harder to rectify. While it is unclear whether this would impact the large infrastructure investments currently recommended by the Biden administration, they may impact the degree to which the civil construction sector can successfully bounce back in the first half of 2021.”
Industry Sees Data Benefits but Paper is Still Prominent
In addition to supply chain insights, The Civil Quarterly provides an in-depth look and benchmark in the ways in which contractors gather and analyze data. It shows an industry that recognizes the benefits in the use of data but is still reliant on manual processes.
For instance, many civil contractors still use paper forms for collecting data, especially for safety (38%) and material project delivery (31%). And of those collecting data, 32% conduct the actual analysis of it manually on paper, especially when it comes to safety.
Despite these limitations, The Civil Quarterly shows about half of contractors report their data gathering and analysis efforts result in:
- More accurate estimations during the bidding process (56%)
- Reduced rework (52%)
- Better productivity (52%)
- Increased budget performance (51%)
- Improved safety (48%)
The Civil Quarterly is the result of a partnership with Infotech, Hexagon and Command Alkon and Digital Construction Works, and is based on original research collected from civil contractors and engineers. It is available for free download to help all those who have a stake in the U.S. civil construction industry.
Information provided by Dodge Data & Analytics and edited by Becky Schultz.